11/07/2026
The characteristics and market rates for each interest rate type (as of June 2026) are as follows:
1. Variable Interest Rate. Characteristics: The applicable rate is reviewed every six months; while there is a risk of rising rates, this type offers the lowest initial interest rate. Market Rates: Applicable rates are low, hovering around 0.85% to 1.0%. Advantages: You can fully benefit from low interest rates and keep monthly repayments low. Disadvantages: There is a risk that repayment amounts will increase if interest rates rise in the future. However, safeguards such as the "5-year rule" (repayment amounts remain unchanged for five years) and the "125% rule" (repayment amounts are capped at 1.25 times the previous amount, even if rates rise) are commonly in place. Recommended for: Those with financial flexibility in their repayments and the ability to handle potential rate hikes (e.g., having savings). Approximately 80% of actual mortgage borrowers choose this variable rate option.
2. Fixed-Period Rate Option (e.g., 10-year fixed). Characteristics: The interest rate is fixed for a specific period (2, 3, 5, or 10 years, etc.) starting from the time of borrowing. Market Rates: Rates for 10-year fixed loans have risen to around 3%–4% at major banks. Advantages: There is no need to worry about rate fluctuations during the fixed period, making household budget management easier. Disadvantages: After the fixed period ends, the loan typically switches to a variable rate based on the prevailing market rate, meaning you may be affected by interest rate increases. Recommended for: Those with a clear life plan, such as wanting to lock in repayment amounts until their children become independent (e.g., a 10-year period).
3. Full-Term Fixed Interest Rate (e.g., Flat 35). Characteristics: The applicable interest rate remains unchanged until the loan is fully paid off. Market Rates: The most common rate for Flat 35 loans is 3.210% (for loan terms of 21–35 years), which is relatively high. Advantages: There is zero risk of interest rate hikes, and the total repayment amount is determined at the time of borrowing, offering the greatest peace of mind. Disadvantages: The interest rate is higher than that of a variable-rate loan, and you will not benefit even if market interest rates fall in the future.
Recommended for: Those who prioritize peace of mind above all else—such as people who feel anxious whenever they see news about interest rate fluctuations, or those with large loan amounts and limited room in their household budget. Key considerations:
In the current climate of rising interest rates,
it is recommended to first consider a "variable-rate" loan (which offers the lowest rates) while also running repayment simulations to ensure your household finances could withstand a rate hike of around 2%. If you are unsure,
